IN RE: Androgel Antitrust Litigation (No. II)

REPLY BRIEF re MOTION for Leave to File Matters Under Seal re: 1730 Notice of Filing, REDACTED

N.D. Ga.June 20, 2018

IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION IN RE ANDROGEL ANTITRUST LITIGATION (II) MASTER DOCKET NO. 1:09-MD-2084-TWT DIRECT PURCHASER CLASS ACTION CASES ROCHESTER DRUG CO-OPERATIVE, INC., ET AL., Plaintiffs, v. UNIMED PHARMACEUTICALS, LLC, ET AL., Defendants CASE NO. 1:09-CV-956-TWT LOUISIANA WHOLESALE DRUG CO., INC., ET AL., Plaintiffs, v. UNIMED PHARMACEUTICALS, LLC, ET AL., Defendants. CASE NO. 1:09-CV-957-TWT MEIJER, INC., ET AL., Plaintiffs, v. UNIMED PHARMACEUTICALS, LLC, ET AL., Defendants. CASE NO. 1:09-CV-958-TWT DIRECT PURCHASER CLASS PLAINTIFFS’ REPLY IN SUPPORT OF MOTION FOR CLASS CERTIFICATION PUBLIC VERSION (REDACTED) Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 1 of 44 i Table of Contents Table of Authorities ................................................................................................... ii INTRODUCTION ..................................................................................................... 1 I. ARGUMENT ...................................................................................................... 3 A. Certification Here Is Consistent with Valley Drug ....................................... 3 B. Defendants’ Effort to Distort Valley Drug Should be Rejected, As the Record Evidence Supports Certification ....................................................... 6 C. Defendants’ Efforts to Show The National Wholesalers Earn More from Brand Drugs Fail. .......................................................................................... 7 D. Defendants’ Attacks on the Wholesalers’ Testimony Are Meritless ............ 9 E. The Record Does Not Support the “Potential” of Class Conflict ...............15 F. Valley Drug Does Not Support A Finding Of Inadequacy .........................18 II. THE CLASS HERE IS SO NUMEROUS THAT JOINDER IS IMPRACTICAL ................................................................................................19 A. The Amended Class Definition Is Appropriate ...........................................19 1. Defendants Had Appropriate Notice. .......................................................22 2. Estoppel Does Not Apply. ........................................................................24 3. Purchasers from Perrigo are Class Members. ..........................................25 4. All Class Members Suffered Overcharges. ..............................................28 5. Individual Corporate Entities Are Each Cognizable Plaintiffs. ...............29 6. King Drug, Frank W. Kerr, and Keiser are Class Members. ...................30 7. Class Representatives Count. ...................................................................31 8. Classes May Contain Large Claimants ....................................................32 B. Joinder Is Impracticable ..............................................................................32 III. CONCLUSION ..............................................................................................35 Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 2 of 44 ii Table of Authorities Federal Cases Abraham v. WPX Energy Prod., L.L.C., 2017 WL 4402398 (D.N.M. Sept. 30, 2017) ...................................................... 21 Am. Sales Co. v. Pfizer, Inc., 2017 WL 3669097 (E.D. Va. Aug. 24, 2017) .............................................passim Am. Sales Co. v. SmithKline Beecham Corp., 274 F.R.D. 127 (E.D. Pa. 2010) ......................................................................... 32 Amchem Prods. v. Windsor, 521 U.S. 591 (1997) ........................................................................................... 32 Associated Gen. Contractors v. Cal. State Council of Carpenters, 459 U.S. 519 (1983) ........................................................................................... 27 Byte v. Hudson, 565 F.3d 1293 (11th Cir. 2009) .......................................................................... 24 Davis v. City of Loganville, 2006 WL 1312411 (M.D. Ga. May 11, 2006) ................................................... 24 Durand v. Hanover Ins. Grp., 2018 WL 935436 (W.D. Ky. Feb. 16, 2018) ............................................... 28, 29 Eastman Kodak Co. v. Atlanta Retail, Inc. (In re Atlanta Retail, Inc.), 456 F.3d 1277 (11th Cir. 2006) .......................................................................... 25 Herman v. Seaworld Parks & Entm’t, Inc. , 320 F.R.D. 271 (M.D. Fla. 2017) ....................................................................... 18 In re Asacol Antitrust Litig., 2017 WL 4118967 (D. Mass. Sept. 14, 2017) ................................................... 32 In re Beef Indus. Antitrust Litig., 600 F.2d 1148 (5th Cir. 1979) ...................................................................... 26, 27 In re Cardizem CD Antitrust Litig., 200 F.R.D. 297 (E.D. Mich. 2001) ..................................................................... 32 Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 3 of 44 iii In re Coord. Pretrial Proceedings in Petrol. Prods. Antitrust Litig., 691 F.2d 1335 (9th Cir. 1982) ............................................................................ 28 In re K-Dur Antitrust Litig., 2008 WL 2699390 (D.N.J. Apr. 14, 2008) ........................................................ 32 In re K-Dur Antitrust Litig., 2013 WL 5180857 (3d Cir. Sept. 9, 2013) ......................................................... 32 In re Lidoderm Antitrust Litig., 2017 WL 679367 (N.D. Cal. Feb. 21, 2017) ...................................................... 33 In re Lower Lake Erie Iron Ore Antitrust Litig., 998 F.2d 1144 (3d Cir. 1993) ............................................................................. 28 In re Modafinil Antitrust Litig., 837 F.3d 238 (3d Cir. 2016) ............................................................................... 26 In re Nexium Esomeprazole Antitrust Litig., 296 F.R.D. 47 (D. Mass. 2013) ........................................................ 30, 31, 32, 34 In re Niaspan Antitrust Litig., 2015 WL 4197590 (E.D. Pa. July 9, 2015) ........................................................ 17 In re Processed Egg Prods. Antitrust Litig., 881 F.3d 262 (3d Cir. 2018) ............................................................................... 27 In re Prograf Antitrust Litig., 2013 WL 2395083 (D. Mass. Apr. 23, 2013) .................................................... 32 In re Skelaxin (Metaxalone) Antitrust Litig., 2014 WL 2002887 (E.D. Tenn. May 15, 2014) ................................................. 26 In re Solodyn Antitrust Litig., 2017 WL 4621777 (D. Mass. Oct. 16, 2017) ......................................... 30, 33, 34 In re Wellbutrin XL Antitrust Litig., 2011 WL 3563385 (E.D. Pa. Aug. 11, 2011) ..................................................... 32 iSocial Media, Inc. v. Bwin.Party Dig. Entm’t Pub. Ltd. Co., 2013 U.S. Dist. LEXIS 146701 (S.D. Fla. Oct. 10, 2013) ................................. 29 Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 4 of 44 iv M.H. v. Berry, 2017 WL 2570262 (N.D. Ga. June 13, 2017) .................................................... 18 Meijer, Inc. v. Warner Chilcott Holdings Co. III, 246 F.R.D. 293 (D.D.C. 2007) ..................................................................... 32, 34 Menking ex rel. Menking v. Daines, 287 F.R.D. 174 (S.D.N.Y. 2012) ........................................................................ 21 Mid-W. Paper Prods. Co. v. Cont’l Grp., Inc., 596 F.2d 573 (3d Cir. 1979) ............................................................................... 26 Mylan Pharms., Inc. v. Warner Chilcott Pub. Ltd., 2014 WL 631031 (E.D. Pa. Feb. 18, 2014) ........................................................ 32 Navelski v. Int’l Paper Co., 244 F. Supp. 3d 1275 (N.D. Fla. 2017) .............................................................. 18 Prado-Steiman v. Bush, 221 F.3d 1266 (11th Cir. 2000) .......................................................................... 21 Ray v. Judicial Corr. Servs., 2017 U.S. Dist. LEXIS 154114 (N.D. Ala. Sept. 20, 2017) .............................. 21 Rindfleisch v. Gentiva Health Servs., 2011 U.S. Dist. LEXIS 57949 (N.D. Ga. Apr. 13, 2011) .................................. 20 Savanna Grp., Inc. v. Trynex, Inc., 2013 WL 66181 (N.D. Ill. Jan. 4, 2013) ............................................................ 21 Slater v. U.S. Steel Corp., 871 F.3d 1174 (11th Cir. 2017) .......................................................................... 25 U.S. Gypsum Co. v. Ind. Gas Co., 350 F.3d 623 (7th Cir. 2003) ........................................................................ 27-28 Valley Drug Co. v. Geneva Pharms., Inc., 350 F.3d 1181 (11th Cir. 2003) ...................................................................passim Veal v. Crown Auto Dealerships, Inc., 236 F.R.D. 572 (M.D. Fla. 2006) ....................................................................... 21 Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 5 of 44 v Vega v. T-Mobile USA, Inc., 564 F.3d 1256 (11th Cir. 2009) .......................................................................... 20 Rules Fed. R. Civ. P. 23 .................................................................................................... 33 Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 6 of 44 1 INTRODUCTION Defendants do not dispute that evidence of their conspiracy to delay AndroGel’s generic entry is common to all class members. Nor do defendants dispute that common issues predominate over any individual issues. In short, whether this case involved one plaintiff or one hundred, the trial would look basically the same. Certifying this case as a class action is plainly superior to any other mechanism for resolving this nearly decade-old dispute. Defendants, however, oppose class certification. First, they badly misread Valley Drug;1 and second, they wrongly claim the proposed class of more than thirty entities is too small. Defendants’ arguments are meritless. The Court in Valley Drug, decided in 2003, was concerned that certain class members – AmerisourceBergen Drug Corp. (“ABDC”), Cardinal Health, Inc. (“Cardinal”) and McKesson Corp. (“McKesson”) (the “national wholesalers”) – might have “different interests and objectives than the named representatives” given the record of fifteen years ago.2 The record now is completely different.3 Since 1 Valley Drug Co. v. Geneva Pharmaceuticals, 350 F.3d 1181, 1196 (11th Cir. 2003). 2 Id. at 1196. 3 This Court has recognized that the factual record here is different. During a January 24, 2012 hearing, the Court stated: “I think for the reasons described by Mr. Winick [counsel for McKesson] this case is in a very different posture right now as compared to the Valley Drug case when it went up to the 11th Circuit.” See Tr. of the Motions Hearing on Jan. 24, 2012 (“1/24/12 Tr.”), Dkt. No. 561 at 68 also attached as Exh. Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 7 of 44 2 2003, the national wholesalers have spoken loudly, directly, and often that this case, and similar class actions seeking overcharges for impaired generic competition, are in their interests. They have all expressly stated that the named plaintiffs here can and do represent their interests, that generic competition serves their economic interests as they see them,4 and they have repeatedly supported similar class actions over the past 15 years. The national wholesalers’ interests are completely aligned with those of the named plaintiffs and other class members in seeking to recoup their overcharges. At the January 24, 2012 hearing, counsel for each national wholesaler explained that the evidence now is utterly different than the evidence before the Valley Drug court, and that the issues Valley Drug identified no longer exist. McKesson’s counsel, Mr. Winick, explained that unlike in Valley Drug, this Court is “being presented with substantial evidence from the Big Three that [they] support[] this case, that [they have] historically supported these cases, that [they] make[] lots of money from generic entry and that the potential damages in this case greatly outweigh any concerns.”5 29 to the Declaration of David F. Sorensen dated Feb. 9, 2018 (“Sorensen Decl.”). 4See, e.g., Exs. 8 & 12 (2011 declaration & 2018 letter from McKesson); 9 & 11 (2011 declaration & 2018 letter from Cardinal); and 9 & 10 (2011 declaration and 2018 letter from ABDC) to the Sorensen Decl. 5 1/24/12 Tr., at 54. Mr. Winick also explained that each company produced business Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 8 of 44 3 The adequacy requirement of Rule 23(a)(1) is designed to protect absent class members. Defendants seek to turn Rule 23(a)(1) on its head. As to impracticability of joinder, the class contains many small claimants who could not practically pursue this action outside of a class. And any former class member who could afford to could file suit could do so in any appropriate jurisdiction around the country. That is the opposite of judicial efficiency. Certification should be granted. I. ARGUMENT A. Certification Here Is Consistent with Valley Drug Rule 23(a)(4) requires that “the representative parties . . . fairly and adequately protect the interests of the class.” As its text states, the Rule is designed to protect absent class members, not defendants who, by definition, are seeking (as here) to defeat the claims of all class members. Valley Drug did not hold that that a conflict existed between the proposed plans showing they each “support the early entry of generics;” (id. at 52), and that they took no steps to delay generic AndroGel. Id. at 53. Cardinal’s counsel explained that, unlike in Valley Drug, here, there was “evidence put forth to the Court that the Big Three do not experience a net gain from the delayed entry of generics; but, in fact, we want generics and want them as early as possible.” Id. at 34-35. Cardinal’s counsel further explained that unlike in Valley Drug where the Court found that the national wholesalers used cost-plus pricing, there is contrary evidence in this case “that’s been developed over nearly ten years of case law…that the Big Three do not price generics on a cost-plus basis.” Id. at 35. Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 9 of 44 4 class representatives there and the national wholesalers. The record there in 2003 suggested that generic competition might be against the national wholesalers’ interests, and plaintiffs had “not offered any facts to challenge defendants’ assertions that the three national wholesalers . . . experienced a net gain from the absence of generic drugs in the market.”6 This led the Court to “imagine” that the national wholesalers might “have substantially different interests and objectives” than the named plaintiffs.7 The record here, fifteen years later, is starkly different and shows that no conflict exists. First, the national wholesalers have each affirmatively stated that this class action is in its economic interests; it supports this case proceeding as a class action; and the named plaintiffs can adequately represent its interests. No such statements were before the Valley Drug panel. Second, the national wholesalers, since 2003, have been class members in two dozen similar class actions and have never opted out of any certified class, never objected to any class settlement, and have submitted letters supporting various class settlements.8 This long track record did not exist in 2003. 6 350 F.3d at 1190. 7 Id. at 1196. 8 See App. A (list of class settlements in similar cases alleging delayed generic entry; no absent class member objected nor opted out, other than Retailer Plaintiffs filing Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 10 of 44 5 Third, this Court permitted defendants to depose a witness from each national wholesaler and subpoena documents from each company. Each witness testified that generic entry was in its company’s interest. Cardinal’s witness testified .9 ABDC’s witness testified that 10 McKesson’s witness testified that 11 None of this evidence was before the Valley Drug panel. Unlike the Valley Drug plaintiffs who “[h]ad not offered any facts to challenge defendants’ assertions,” DPPs have proffered evidence and expert testimony that directly rebut defendant’s arguments’ about net benefit. The record here, now, their own suits); see also Ex. 1 to the Declaration of Ellen T. Noteware (“Noteware Decl.”) submitted herewith (December 2017/January 2018 letters from each of the national wholesalers supporting settlement in In re Celebrex Antitrust Litig., Case No. 2:14-cv-00361 (E.D. Va.)); and Ex. 2 to the Noteware Decl. (August 2017 letters from each supporting the settlement in In re K-Dur Antitrust Litig., No. 2:01-cv- 01652 (D.N.J.)). 9 See 5/18/12 Deposition of Craig P. Cowman (“Cowman Dep.”) at 214:23-215:20 (Ex. 3 to the Noteware Decl.). 10 See 5/16/12 Deposition of Brian Jones (“Jones Dep.”) at 340:25-341:2 (Ex. 4 to the Noteware Decl.). 11 See 5/23/12 Deposition of Vinod Melvani (“Melvani Dep.”) at 114:10-15. (Ex. 5 to the Noteware Decl.). Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 11 of 44 6 shows that the representative plaintiffs can and do adequately represent the interests of the national wholesalers and the class. B. Defendants’ Effort to Distort Valley Drug Should be Rejected, As the Record Evidence Supports Certification Defendants do not dispute that the national wholesalers (like all wholesalers) earn higher per-unit profit margins on generics. The record shows that: ● “Cardinal Health generally profits more upon entry of generics into the market than when the brand is sold exclusively.” Declaration of Craig Cowman dated 12/7/11 (Ex. 6 to Sorensen Decl.) ¶ 4. ● “The profit percentage for generics is much greater than brand drugs because of competition when generics enter the market.” Id. ¶ 5. “As a result, Cardinal Health’s strong preference is for expedited entry of a generic to market rather than delay.” Id. ¶ 4. ● Cardinal Health explained that the bypass that may occur when retail companies buy the generic directly is typically overcome by the increased profit margins for the sale of generics. Id. ¶ 7. ● ABDC “sells generic drugs at a higher profit margin than branded drugs, and therefore, [ABDC] has obvious economic incentives to maximize its sales of generic drugs.” Declaration of Brian Jones dated 12/7/11 (Ex. 5 to Sorensen Decl.) ¶ 5. ● ABDC “pays very close attention to the generic marketplace because generic drugs are extremely important to [its] profitability. . . In fact, generic drugs have a much higher economic value than branded drugs.” Id. ¶ 10. ● ABDC “does not formally analyze whether a specific generic drug will be more profitable than the branded equivalent because the assumption is that generic drugs deliver a higher level of value than branded drugs.” Id. ¶ 11. ● ABDC “always wants generic drugs to enter the market at the earliest possible date as they generate much more economic value than their branded counterparts.” Id. ¶15(a). Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 12 of 44 7 ● Because “generic drugs have higher economic value than branded drugs, [ABDC] prefers generics because of the increased profit margin.” Id. ¶15(b). ● See id. ¶15(d), see also Supplemental Surrebuttal Report of Jeffrey J. Leitzinger, Ph.D filed herewith (“2018 Leitzinger Surrebuttal”) ¶¶ 12-21. ● “McKesson benefits from the early entry of generics.” Declaration of Vinod Melvani dated 12/6/11 (Ex. 7 to Sorensen Decl.) ¶¶ 9-10. ● “McKesson enjoys significantly larger profits from the entry of generic drugs to market” than it does through brand name drug sales at every stage of generic entry.” Id. ¶ 10. ● McKesson typically “sells brand drugs on a cost minus basis, meaning that McKesson sells the brand name drugs at less than its Wholesale Acquisition Cost . . . [and] only can achieve a modest profit from brand name sales based on prompt pay discounts, chargebacks and fees for service.” Id. ¶ 9. ● When generic drugs are available, McKesson can “negotiate a lower price for the generic drug” which results in “significantly higher profits” for McKesson for sales of generic drugs vs. sales of brand name drugs “even after accounting for any loss of revenue due to generic bypass.” Id. ¶ 10. C. Defendants’ Efforts to Show The National Wholesalers Earn More from Brand Drugs Fail. Defendants’ expert, Dr. Rubinfeld, ignores the national wholesalers’ views of their own interests.12 Instead, he relies on a third-party report about the wholesale 12Dr. Rubinfeld was defendants’ expert in Valley Drug also. Notably, after extensive “downstream” discovery on remand, defendants could not articulate any class conflict; the district court found “there is no class antagonism or conflict, much less a fundamental one,” and although the court denied certification under its view of Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 13 of 44 8 drug business (the “Pembroke Report”),13 which actually supports the national wholesalers’ testimony: ● “Generic drugs generate much higher buy-side gross margins for wholesalers. This derives from the channel’s enhanced bargaining position with generic manufacturers compared with its position with manufacturers of brand-name drugs. We estimate that in 2010 generic drugs contributed $2.6 billion more in gross profits for the Big Three wholesalers than brand drugs did.” Pembroke Report at 4. ● “Although wholesaler revenues are linked most closely to sales of brand-name drugs, the majority of wholesaler profits come from generic drugs.” Id. at 44; see also id. Ex. 21, p. 44 (chart showing that 65% of the national wholesalers’ gross profits are derived from generic drug sales). ● “[A] brand-to-generic shift also improves profitability due to the reduced inventory investment required.” Id., at p. 44; see also id. at 52-54 (describing how national wholesalers’ profits increase when drugs genericize because their cost of inventory decreases). Valley Drug (a view that, respectfully, DPPs consider erroneous), the court certified the same class in connection with settlement – with defendants’ assent – finding no conflict. See DPP Open Br. at 5 & n. 11; 33-34 & nn. 141-43. For example, in addition to the testimony and declaration cited above and the materials produced by the national wholesalers, McKesson’s CFO clarified on a publicly available investor conference call “at every point of the lifecycle [of generic drug entrant], our gross profit dollars from the generic are above what they were on the brand.” Transcript of 6/16/11 McKesson Investor Day Teleconference at p.27, Ex. 1 to Melvani Dep attached as Ex. 6 to the Noteware Decl. 13 Adam J. Fein, Pembroke Consulting, Inc. 2010-11, Economic Report on Pharmaceutical Wholesalers, attached as Ex. 4 to the Noteware Decl. Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 14 of 44 9 D. Defendants’ Attacks on the Wholesalers’ Testimony Are Meritless Each national wholesaler explained that generics are more profitable than brands, and that generic entry is in its economic interests. Such testimony should be dispositive. Nothing in Valley Drug supports the idea that defendants or their expert can contest what absent class members say about their own economic interests under Rule 23(a)(4), which is designed to protect absent class members. McKesson. 14 Melvani Dep. at 308:4-6 (Ex. 5 to Noteware Decl.). 15 Defendants Solvay and Watson’s Opposition to Direct Purchaser Class Plaintiffs’ Motion for Class Certification (Dkt No. 1694) (“S/W Opp.”) at 33. Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 15 of 44 10 Q: 16 17 Defendants attack Mr. Melvani for not analyzing profitability on a “drug-by-drug basis”18 even though he testified that 19 McKesson knows its economic interests better than defendants’ or their expert. 16 Id. at 308:21- 310:9 (defendants’ comment deleted). See also id. 62:9-11 ; 153:2-9 ( ); 311:17-21( ). 17 Id. at 362:12-17 (emphasis added). 18 S/W Opp. at 33. 19 See, e.g., Melvani Dep. at 307:8-12 ( ). Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 16 of 44 11 Cardinal. 20 21 .22 As the document states: 23 24 Thus, 25 20 Cardinal_0435, Ex. 14 to the Sorensen Decl. 21 Id. at p. 4. 22 Id. 23 Id. (emphasis added). 24 See Cowman Dep. at 241:15-242:18; 290:10-17; 366:10-12 (Ex. 3 to Noteware Decl.). 25 Id. at 349:23-350:3. Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 17 of 44 12 26 27 28 29 30 31 Defendants 26 Id. at 22:24-23:17. 27 Id. at 166:16-170:19. 28 S/W Opp. at 34. 29 Id. at 165:13-166:4. 30Id. at 169:25-170:6. Defendants ignore See id. 37:8-12. 31 See S/W Opp. at 34. Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 18 of 44 13 32 33 ABDC. 34 35 36 32 Cowman Dep. at 221:4-24; see also generally id at 221-226, 258-260. 33 Id. at 260:5-9; see also id at 276:18-277:10. 34 Jones Dep. at 49:6-12. 35 Id. at 293:22-295:21. 36 Id. at 295:25-296:6 (defendants’ commentary omitted). Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 19 of 44 14 38 39 40 37 Id. at 296:9-18. 38 Id. at 302:19-23. 39 Id. at 323:13-19. id. at 329:9-11, and, Id. at 332:21- 333:12. 40 Id. at 336:21-337:18 (emphasis added). Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 20 of 44 15 E. The Record Does Not Support the “Potential” of Class Conflict The declarations, documents, and deposition testimony of the national wholesalers, and the named plaintiffs41 all show that they were harmed by defendants’ unlawful conduct in delaying AndroGel’s generic entry. Defendants’ expert, Dr. Rubinfeld, .42 For example, Dr. Rubinfeld cherry-picked the highest possible brand margin figures, but using more reasonable figures in the record flips many of his results. Dr. Rubinfeld admits43 , for example, would alter his results (i.e., 41 See DPP Open Br. pp. 23-31. 42 See 2018 Leitzinger Surrebuttal ¶ at 3. 43 Proposed Supplemental Report of Daniel L. Rubinfeld Regarding Class Certification dated April 6, 2018, fn. 8. Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 21 of 44 16 .44 Similarly, Dr. Rubinfeld 45 Dr. Leitzinger ”46 As Dr Leitzinger explains, days inventory outstanding (DIO).47 DIO is the amount of time that a product purchased from a supplier is held in the wholesaler’s inventory before sale. For example, if a wholesaler receives product on January 1 and sells it on January 20, DIO would be 19 days. DIO is critical to evaluating float. Compare two examples. First, assume the wholesaler buys product on Day 0; holds the product for 18 days (DIO = 18), then 44 See 2018 Leitzinger Surrebuttal ¶ 5. 45 Id. at ¶ 6. McK00280 (Ex. 9 to Noteware Decl.); see also 2018 Leitzinger Surrebuttal ¶8. Dr. Rubinfeld stands by his original choice of even though the deposition testimony of McKesson’s Melvani, . See id. ¶ 7; see also Melvani Dep. at 267-270 (explaining that . 46 2018 Leitzinger Surrebuttal ¶ 10; see also id. ¶¶ 11-25. 47 Id. ¶¶ 13-14. Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 22 of 44 17 sells it to a retailer. The retailer pays the wholesaler 12 days later (on Day 30), and the wholesaler pays its supplier 4 days after that (Day 34). The wholesaler has a positive float of 4 days. See 2018 Leitzinger Surrebuttal at Figure 1. But now change DIO from 18 to 26 days. The wholesaler now sells product to the retailer on Day 26, and, as before, gets paid 12 days later, and, as before, the wholesaler pays its own supplier on Day 34. But notice that now the wholesaler is paying its supplier (on Day 34) before the wholesaler is getting paid by the retailer (Day 38). There is now a negative float of 4 days. All because of a change in DIO – a factor that Dr. Rubinfeld ignores. See 2018 Leitzinger Surrebuttal, Figure 2. And Dr. Leitzinger’s DIO estimates came from the same source cited by Dr. Rubinfeld – the Pembroke Report. Dr. Rubinfeld claims that he relied on , but he only looked at testimony 48 48 See 2018 Leitzinger Surrebuttal at ¶¶ 17-21. As Dr. Leitzinger explains, the . Defendants also continue to assert arguments about “bypass” even though DPPs dispute it has any legal relevance, see In re Niaspan Antitrust Litig., 2015 WL 4197590 at * 2 (E.D. Pa. July 9, 2015) (“this Court agrees with those courts that have rejected the generic bypass theory relied upon by defendants as inconsistent with Hanover Shoe and its progency”), and, as a factual matter, the Class was not bypassed when generic entry occurred. See May 19, 2017 Leitzinger Supplemental Rebuttal Report at ¶65 (Ex. 2 Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 23 of 44 18 F. Valley Drug Does Not Support A Finding Of Inadequacy Valley Drug does not mean a conflict exists simply because a defendant alleges one.49 Defendants suggest that Valley Drug requires DPPs first to prove a full-blown lost profits claim – a claim they have not brought – and do so on a classwide basis before the Court may certify the class to pursue the claim for overcharges it has brought. There is a huge difference, however, between requiring plaintiffs to show that generic entry is in the economic interests of wholesalers to ensure that they are being adequately represented by the class representatives – something DPPs have shown overwhelmingly and all that Valley Drug requires – and litigating and proving a full-blown claim for lost profits at a trial – something Valley Drug does not require. Defendants’ rewriting of Valley Drug should be rejected. to Sorensen Decl.). As Dr. Leitzinger explained, Id. ¶30. Defendants fixate on only part of the Class in an effort to show bypass, even when it does not exist here. 49 See, e.g., M.H. v. Berry, 2017 WL 2570262, at *7 (N.D. Ga. June 14, 2017) (Thrash, J.) (rejecting conflict argument as “largely based on speculation”); Herman v. Seaworld Parks & Entertainment, Inc., 320 F.R.D. 271, 294 (M.D. Fla. 2017) (rejecting defendants’ speculation that some class members may have benefitted from challenged conduct); Navelski v. Int’l Paper Co., 244 F. Supp. 3d 1275, 1277 (N.D. Fla. 2017) (same). Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 24 of 44 19 II. THE CLASS HERE IS SO NUMEROUS THAT JOINDER IS IMPRACTICAL The proposed class contains 33 separate, geographically dispersed entities. Defendants’ efforts to cut that number down must be rejected. A. The Amended Class Definition Is Appropriate Defendants first try to eliminate Class members covered by the current proposed Class definition who were not covered by the definition proposed in 2012.50 DPPs’ current definition recognizes that generic AndroGel actually entered after 2012, and this entry shows that entities that purchased the generic were also overcharged by the same unlawful delay that injured all class members. After generic AndroGel belatedly entered in late 2014, its price was higher than it would have been had the generic entered years earlier, because it is well- established that generic prices predictably fall over time as additional generic competitors enter. That is precisely what happened after generic AndroGel entered in late 2014: prices dropped over time as the number of generic competitors increased.51 Hence an unlawful delay in generic competition caused entities that bought generic AndroGel (but who had not previously purchased branded AndroGel 50 Par/Paddock’s Opposition to Direct Purchaser Class Plaintiffs’ Motion for Class Certification (“P/P Opp.” Dkt. No. 1691) at 2-10; S/W Opp. at 3-4. 51 Leitzinger August 19, 2016 Report at ¶¶ 10, 26 (Ex. 1 to Sorensen Decl.). Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 25 of 44 20 directly) to also suffer overcharges. This overcharge on generic purchases, sometimes called a “generic-generic” overcharge, has always been part of DPPs’ case. See DPPs’ Complaint dated May 29, 2009, Dkt. No. 108 ¶ 167 (“Absent Defendants’ illegal conduct, generic competition would have already occurred, and Plaintiff and other direct purchasers of AndroGel would have been able to purchase AndroGel and its generic equivalents at significantly lower prices that they were forced to pay because of Defendants’ illegal acts to delay generic competition”).52 When DPPs moved for certification in 2012, however, generic AndroGel was still years away. Plaintiffs could not, therefore, identify the “generic-generic” class members. Now we can. DPPs have proposed an appropriate, amended class definition. Rule 23(c)(1)(C) expressly provides that a class certification order “may be altered or amended before final judgment.”53 The Eleventh Circuit explains “[t]hat 52 See also Dkt No. 108 at ¶ 16 (“Had there been free and fair competition in the market for [brand name AndroGel and its AB-rated generic equivalents], Plaintiff and other direct purchasers of AndroGel would have paid less for [brand name AndroGel and its AB-rated generic equivalents] than they paid because of Defendants’ illegal acts to delay generic competition.”). 53 Defendants cite only one Rule 23 decision on this issue, Vega v. T-Mobile USA, Inc., 564 F.3d 1256 (11th Cir. 2009), which does not stand for the proposition that amendments to class definitions outside of the pleadings are per se improper. See P/P Opp. at 9n. In Vega, the Eleventh Circuit examined the modified class definition before holding the named plaintiff’s claims were not typical. Id. at 1276-77. Defendants also cite two collective action cases under section 216(b) of the Fair Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 26 of 44 21 power is critical, because the scope and contour of a class may change radically as discovery progresses and more information is gathered about the nature of the putative class members’ claims.” Prado-Steiman v. Bush, 221 F.3d 1266, 1273 (11th Cir. 2000). 54 “[T]he Court and the parties need to conform the pleadings to the reality of discovery[…] Some flexibility – not more formality – is needed in crafting a class action where one is warranted.” Abraham v. WPX Energy Prod., LLC, 2017 WL 4402398, at *18 (D.N.M. Sept. 30, 2017). Thus, a “change of class definition will not forestall the Court’s class certification inquiry.” Savanna Group, Inc. v. Trynex, Inc., 2013 WL 66181, at *3 (N.D. Ill. Jan. 4, 2013) (allowing changed definition).55 Labor Standards Act. Those cases are inapplicable here because “it is clear that the requirements for pursuing a § 216(b) class action are independent of, and unrelated to, the requirements for class action under Rule 23 of the Federal Rules of Civil Procedure.” Grayson v. K Mart Corp., 79 F.3d 1086, 1096 n.12 (11th Cir. 1996). See P/P Opp. at 9 n.9. (citing Herrera v. United States Serv. Indus., 2013 U.S. Dist. LEXIS 53565, (M.D. Fla. Apr. 15, 2013); Rindfleisch v. Gentiva Health Servs., 2011 U.S. Dist. LEXIS 57949 (N.D. Ga. April 13, 2011)). 54 See also Veal v. Crown Auto Dealerships, Inc., 236 F.R.D. 572, 577 (M.D. Fla. 2006) (granting class certification where plaintiff expanded the proposed class definition in motion for class certification); Ray v. Judicial Corr. Servs., 2017 U.S. Dist. LEXIS 154114, at *19-20 (N.D. Ala. Sep. 20, 2017) (relying upon the class definition “referenced [for the first time] in Plaintiffs’ Motion for Class Certification” when deciding a Daubert motion because “it is well settled that the court can alter or amend class definitions even after certification.”) (citing Prado- Steiman, 221 F.3d at 1273). 55 See also Menking ex rel. Menking v. Daines, 287 F.R.D. 174, 181 (S.D.N.Y. 2012) (certifying class set forth in certification motion where “[b]ased on evidence Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 27 of 44 22 Following generic entry, all class members suffered injury in the form of overcharges on their purchases of generic AndroGel 1%. As Dr. Leitzinger explained: ” Leitzinger August 19, 2016 Report at ¶¶ 10, 26 (Ex. 1 to Sorensen Decl.). That some class members purchased only generic AndroGel is of no consequence.56 1. Defendants Had Appropriate Notice. DPPs pleaded generic-generic damages in the Complaint. Additionally, the expert report plaintiffs’ served in 2012 told defendants that Leitzinger August 19, 2016 Report at ¶ 99 (“2016 Leitzinger obtained in discovery… Plaintiff concluded that a new and expanded statewide definition for the proposed class would be proper”). 56 Defendants’ reliance on Celebrex is misplaced. Am. Sales Co., LLC v. Pfizer, Inc., 2017 WL 3669097, at *8 (E.D. Va. July 28, 2017) (“Celebrex”). Here, the class definition includes all generic-only purchasers. The proposed definition in Celebrex had “an unusual limit;” it excluded purchasers of only generic versions of Celebrex who did not obtain decreasing prices on those generic versions, which represented “less than a quarter of the total number of generic-only Celebrex purchasers.” 2017 WL 3669604, at *7. Defendants’ anticompetitive conduct here increased the actual prices paid by all direct purchasers of generic AndroGel. Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 28 of 44 23 Rpt.”) (Ex. 1 to Sorensen Decl.). Nearly two years ago, on August 19, 2016,57 DPPs expressly notified defendants of the amended definition. Defendants did not object until Par/Paddock filed its Opposition on March 28, 2018. Defendants claim that they did not pursue discovery in 2016 from four class members (Wal-Mart, Kroger, Express Scripts and QK Healthcare) based on DPPs’ statements in opposition to defendants’ Motion for Leave to Serve Subpoenas on Putative Class Members, but the Court allowed defendants to pursue that discovery. See Order dated January 29, 2016 (Dkt. No. 1287) (“Defendant may serve the subpoenas upon Express Scripts Holding Co., QK Healthcare Inc., Pharmaceutical Systems, Inc., Quality Care Products, LLC, Wal-Mart and Kroger.”) (emphasis added). Defendants chose not to pursue it. DPPs never foreclosed the possibility that those entities could become class members in the future or as part of an amended class definition. As defendants themselves told the Court in 2016: “Plaintiffs have refused Defendants’ request to stipulate that these 6 proposed subpoena recipients are not members of the class[.]” Defendants Reply (Dkt. No. 1270) at 14 n 3 (emphasis added). DPPs were also clear that we may “further revise the class definition[.]” DPPs Opp. (Dkt. No. 1253, December 22, 2015) at 12 & n.24. In short, defendants could not have “relied” on 57 See Ex. 45 to Sorensen Decl. Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 29 of 44 24 any representation by DPPs that these four entities were not class members, because as defendants acknowledged, DPPs “refused” to make that representation. Finally, the Court denied discovery from other absent class members because the Court had permitted downstream discovery from the national wholesalers (the focus of Valley Drug) and from the Class Representatives, and so “the additional discovery would be burdensome and time consuming [and] is wholly disproportional to the needs of the case.” Dkt. No 1287. Thus, if generic-only purchasers had been included in the class definition at that time, defendants would not been able to pursue discovery from them regardless. Defendants have therefore suffered no prejudice. 2. Estoppel Does Not Apply. Defendants wrongly assert that DPPs are estopped from including the four class members in the current class.58 Judicial and equitable estoppel have no application here. As the Eleventh Circuit explained: “Equitable estoppel provides relief for parties who have been induced into behavior through another party’s false representation; judicial estoppel prevents a party from later raising completely 58 S/W Opp. at 3-4. None of the cases defendants cite involves an amended class definition. In Davis v. City of Loganville, plaintiffs affirmatively told defendants that they would not seek damages for emotional distress. 2006 WL 1312411, at *5 (M.D. Ga. May 11, 2006). In Byte v. Hudson, plaintiffs sought damages after trial that it had forsworn in its pretrial statement. 565 F.3d 1293, 1304 (11th Cir. 2009). Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 30 of 44 25 unknown claims.”59 Neither situation applies here. DPPs did not hide the possibility that generic-only purchasers could be class members so judicial estoppel does not apply.60 Their potential inclusion was known through DPPs’ Complaint, prior expert report, and refusal to stipulate that these four (as subpoena targets) were not class members. DPPs did not induce defendants to drop their subpoenas and made no false representations. Accordingly, equitable estoppel does not apply. 3. Purchasers from Perrigo are Class Members. Defendants next erroneously claim that class members who purchased generic AndroGel from Perrigo are seeking “umbrella” damages. “Umbrella” damages, however, typically refer to a situation where an innocent competitor already on the market has raised its own prices to take advantage of the higher “umbrella” price resulting from the antitrust violation. Here, by contrast, class members were overcharged because fewer sellers actually sold generic AndroGel due to defendants’ unlawful conduct. The generic delay directly caused these class members to suffer overcharges because generic prices would have fallen as generic competition escalated in the absence of defendants’ agreement to delay generic 59 Eastman Kodak Co. v. Atlanta Retail, Inc. (In re Atlanta Retail, Inc.), 456 F.3d 1277, 1291 (11th Cir. 2006) (citations omitted). 60 Slater v. United States Steel Corp., 871 F.3d 1174, 1187 (11th Cir. 2017) (“When a plaintiff intended no deception, judicial estoppel may not be applied). Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 31 of 44 26 entry. Generic AndroGel prices, indeed, fell over time. Had generic competition started earlier, generic prices beginning December 2014 would have been lower than they actually were. These are not “umbrella” damages.61 Even if class members’ purchases from Perrigo are considered “umbrella” damages, defendants’ argument fails because such damages are expressly permitted in the Eleventh Circuit. In In re Beef Antitrust Litig., members of the cattle industry sued food retailers alleging an unlawful conspiracy to drive down beef prices. 600 F.2d 1148, 1166 (5th Cir. 1979). Plaintiffs sought to recover damages from sales to companies not alleged to have been part of the conspiracy, and the Fifth Circuit held that they could do so. Plaintiffs’ theory of damages in that case included “that the activities of the alleged price-fixing conspiracy depressed wholesale prices generally, and not simply the prices paid by members of the conspiracy[.]” Id at 1166 n. 24. In allowing the class to pursue those “umbrella” damages, the Eleventh 61 Defendants rely on In re Skelaxin (Metaxalone) Antitrust Litig., 2014 WL 2002887 (E.D. Tenn. May 15, 2014), which relied on Mid–West Paper Products Co. v. Continental Group Inc., 596 F.2d 573 (3d Cir. 1979). The Third Circuit has distinguished Mid-West Paper, where a third party seller raised prices under the umbrella of an ongoing price-fixing conspiracy, from a case like this one, where defendants allegedly engaged in “market exclusion, as it concerns conduct that prevents a competitive market from forming at all.” In re Modafinil Antitrust Litig., 837 F.3d 238, 264-65 (3d Cir. 2016). In such instances, damages are available to “all market customers” because “all suffer equally from the foreclosure of choice.” Id. at 265 (emphasis added). In Modafinil, the plaintiffs also proceeded without a “global conspiracy claim.” Id. at 264. Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 32 of 44 27 Circuit rejected the same argument defendants make here: “We disagree:…that one who deals with a nonconspiring competitor of price-fixing firms lacks standing to sue those firms for treble damages.” Id. Faced with this controlling precedent, Solvay and Watson suggest that district courts in the Eleventh Circuit should not adhere to In re Beef after Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 520 (1983) (“AGC”). The Eleventh Circuit, however, has not held that In re Beef is no longer binding.62 Moreover, appellate court decisions after AGC are in line with In re Beef. See In re Processed Egg Prods. Antitrust Litig., 881 F.3d 262, 276 (3d Cir. 2018) (holding that plaintiffs could recover damages for products whose manufacture involved non-conspirators: “Regardless of who actually collected the overcharge, the Purchasers’ econometric analysis purports to show the ‘difference between the actual [supracompetitive] price and the presumed competitive price’ of the egg products they purchased. This purported difference, and the Purchasers’ resulting injury, was allegedly a direct and intended result of the Suppliers’ conspiracy to reduce the supply of eggs and to artificially inflate the price of egg products.”) (emphasis and alteration in original); U.S. Gypsum Co. v. Ind. Gas Co., 62 Defendants attempt to downplay In re Beef by citing out-of-circuit district court decisions. See S/W Opp. at 6 n.3. Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 33 of 44 28 350 F.3d 623, 627-28 (7th Cir. 2003) (holding that when competitors conspire to restrict output, plaintiffs may recover damages for purchases from non-conspirators: “customers of fringe firms (sellers that have not joined the cartel) pay this higher [market] price, and thus suffer antitrust injury, just like customers of the cartel’s members”); In re Lower Lake Erie Iron Ore Antitrust Litig., 998 F.2d 1144, 1168- 69 (3d Cir. 1993) (holding that plaintiffs may recover damages resulting from higher prices paid to non-conspirators: “Plaintiffs made payments to ‘defendants and non- defendants alike, but it was unquestionably [Plaintiffs] who bore the brunt of the increased costs attributed to the [Defendants] agreement to thwart development of the less expensive technology[.]”).63 4. All Class Members Suffered Overcharges. Relying on flawed expert analysis, Defendants claim that five generic only purchasers would be better off pursing a lost profit theory.64 Dr. Rubinfeld’s analysis 63 The only post AGC appellate court decision defendants cite reserved opinion on the instant issue “involving a single level of distribution, a single class of direct purchasers from non-conspiring competitors of the defendants can assert claims for damages against price-fixing defendants under an umbrella theory.” In re Petroleum Products Antitrust Litigation, 691 F.2d 1335, 1340 (9th Cir. 1982). Defendants’ citation to Durand v. Hanover Ins. Grp., Inc., 2018 WL 935436 (W.D. Ky. Feb. 16, 2018) is misplaced. Plaintiffs there waited four years after class certification to request that the court expressly include a specific group of individuals that plaintiffs contended the court left out of the class definition by mistake. 64 S/W Opp. at 7-8. Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 34 of 44 29 is wrong because he assumes that but-for generic prices during the delay period would be equal to actual generic prices. As Dr. Leitzinger explains, 2018 Leitzinger Surrebuttal at ¶¶ 27- 28. 5. Individual Corporate Entities Are Each Cognizable Plaintiffs. Defendants try to collapse distinct class members to artificially reduce the number of class members.65 This is inappropriate since each of the 33 class members is separately incorporated66 and separately purchased (and was overcharged) for AndroGel. There is a strong “presumption of institutional independence of related corporate entities[.]” iSocial Media, Inc. v. Bwin.Party Digital Entm't PLC, 2013 U.S. Dist. LEXIS 146701, at *19 (S.D. Fla. Oct. 10, 2013). Each is listed as a separate entity in the transactional data Defendants produced. Each member of the class that bought AndroGel (or generic AndroGel) “suffered independent injury” 65 Id. at 8. 66 See Ex. 8 (compendium of certificates of incorporation for entities including H.D. Smith and Burlington Drug). Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 35 of 44 30 and is a separate class member. Celebrex, 2017 WL 3669604, at *8; In re Solodyn (Minocycline Hydrochloride) Antitrust Litig., 2017 WL 4621777, at *4 (D. Mass. Oct. 16, 2017). Thus, ‘“subsidiaries should be considered as potential class members to vindicate their own antitrust injury.’” Solodyn 2017 WL 4621777, at *4 (quoting Celebrex, 2017 WL 3669604, at *8).67 6. King Drug, Frank W. Kerr, and Keiser are Class Members. Defendants take issue with King Drug, which ceased operations while this case has been pending. Dr. Leitzinger Leitzinger 2016 Rpt. at n.66 (Ex. 1 to Sorensen Decl.).68 The Court may rely on Dr. Leitzinger’s expert opinion to find that King Drug belongs in the class. Similarly, defendants suggest, without support, that Frank W. Kerr shouldn’t count as class member because it declared bankruptcy.69 Frank W. Kerr, however, 67 Defendants cite Nexium (Esomeprazole) Antitrust Litig., 296 F.R.D. 47, 51 (D. Mass. 2013), but there plaintiffs had not disputed whether corporate entities should be counted separately. Whenever the issue has been litigated, courts have counted such entities individually. 68 Dr. Leitzinger’s opinion was “independent” of the King Drug Declaration challenged by defendants. Id. 69 S/W Opp. at 8. Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 36 of 44 31 has a successor in interest, Frank. W. Kerr Holdings, that acquired all of Frank W. Kerr’s antitrust claims.70 Frank W. Kerr Holdings would need to bring a separate action were the class not certified. Defendants also wrongly try to eliminate .71 , as reflected in Dr. Leitzinger’s Supplemental Rebuttal Report. Leitzinger August 19, 2016 Report at Ex. 5B. 7. Class Representatives Count. Par/Paddock wrongly asserts, without support, that the class representatives should not be counted by the Court in determining whether joinder is impracticable.72 That argument has no basis in Rule 23 or the case law. As a matter of course, class representatives have been considered when courts have determined that the joinder of similar sized analogous classes was impracticable. 73 70 See In re Frank W. Kerr Co., No. 16-51724 (Bankr. E.D. Mich. December 9, 2016) (Dkt. No. 196). 71 P/P. Opp. at 1-2. 72 Id. at 1. 73 Celebrex, 2017 WL 3669097, at *1 (class of 32 geographically dispersed direct purchasers sufficiently numerous); In re Nexium., 296 F.R.D. at 51-53 (class of 24- 29 members certified); In re Prograf Antitrust Litig., 2013 WL 2395083, at *1 (D. Mass. Apr. 23, 2013) (class of 25 certified); Meijer, Inc. v. Warner Chilcott Holdings Co. III, Ltd., 246 F.R.D. 293, 305-06 & n.14 (D.D.C. 2007) (“Ovcon”) Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 37 of 44 32 8. Classes May Contain Large Claimants While the national wholesalers are large companies, “the text of Rule 23(b)(3) does not exclude from certification cases in which individual damages run high. . . .” Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 617 (1997). Thus, “the presence of large claimants in a proposed antitrust class and the possibility that some of them might proceed on their own does not militate against class certification.”74 Solvay and Watson wrongly imply that after Modafinil courts should be skeptical of the national wholesalers’ inclusion in a class. Courts, however, continue to certify analogous classes that include the national wholesalers.75 B. Joinder Is Impracticable Rule 23(a)(1) requires that a class be “so numerous that joinder of all members (class of 30 certified); In re Wellbutrin XL Antitrust Litig., 2011 WL 3563385, at 3- 4 (E.D. Pa. Aug. 11, 2011); (class of 33 certified); Am. Sales Co. v. SmithKline Beecham Corp., 274 F.R.D. 127, 133 (E.D. Pa. 2010) (“Flonase”) (class of 33 certified); In re K-Dur Antitrust Litig., 2008 WL 2699390, at 3-4 (D.N.J. Apr. 14, 2008), aff’d, 686 F.3d 197, 221 (3d Cir. 2012), vacated on other grounds, 133 S. Ct. 2849 (2013), class certification reinstated, 2013 WL 5180857 (3d Cir. Sept. 9, 2013) (class of 30 certified); Mylan Pharms., Inc. v. Warner Chilcott Public Ltd., 2014 WL 631031, at *2 (E.D. Pa. Feb. 18, 2014) (“Doryx”) (settlement class of 23 certified); In re Asacol Antitrust Litig., 2017 WL 4118967, at *1 (D. Mass. Sept. 14, 2017) (settlement class of 26 certified). 74 In re Cardizem CD Antritrust Litig., 200 F.R.D. 297, 325 (E.D. Mich. 2001) (quoting Paper Sys. v. Mitsubishi Corp., 193 F.R.D. 601, 605 (E.D. Wisc. 2000)). 75 See, e.g., Solodyn, 2017 WL 4621777; Celebrex, 2017 WL 3669604; In re Lidoderm Antitrust Litig., 2017 WL 679367 (N.D. Cal. Feb. 21, 2017). Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 38 of 44 33 is impracticable.” 76 “All” does not mean “some[,]”77 and “‘[i]mpracticable does not mean impossible.’”78 The recent King Drug case79 involving the brand drug Provigil demonstrates why joinder of all class members in a case like this is impracticable. There, one third of former class members have not proceeded since the district court denied class certification following remand from the Third Circuit.80 Three absent class members that ultimately chose not to proceed individually submitted declarations explaining that they would be unable to proceed individually because, as small wholesalers, they could not afford to jeopardize their business relationship with suppliers.81 Additionally, proceeding with such a large group of plaintiffs here creates obvious judicial “diseconomies” compared to a class action. Here, as the court found in Celebrex, 2017 WL 3669604, at *10, “the alternative to class certification would 76 Fed. R. Civ. P. 23(a)(1) (emphasis added). 77 DPP Open Br. 18 n.76 (citing cases). 78 Thorpe v. Walter Inv. Mgmt., Corp., 2016 U.S. Dist. LEXIS 33637, at *16 (S.D. Fla. Mar. 16, 2016) (quoting In re Domestic Air Transp. Antitrust Litig., 137 F.R.D. 677, 698 (N.D. Ga. 1991). 79 King Drug Co. of Florence, Inc. v. Cephalon, Inc., 2:06-cv-1797 (E.D. Pa.). 80 Notably, after the same class had been certified in connection with a proposed class settlement with three of the five defendants, not a single class member opted out. 2:06-cv-1797 (E.D. Pa.) (Dkt. No. 870) (Ex.10). In other words, these entities that could have not proceeded on remand plainly wanted to pursue their antitrust claims if they could do so via a class action, but decided they could not practically pursue them outside of a class action. 81 Ex. 11 (Provigil April 18, 2017 Tr. at 9-11, 39-40). Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 39 of 44 34 be largely duplicative litigation that relied on many of the same witnesses and much of the same evidence[.]” A joint action is also impractical, given the “difficulty of coordinating attorney, scheduling, and docketing” so many parties. Solodyn, 2017 WL 4621777, at *5.82 Geographic Dispersion Courts today recognize that widespread “geographic dispersion” (as here, see 2016 Leitzinger Rpt., Ex. E (class member map)) suggests joinder is impracticable, even when putative class members are corporate entities.” Solodyn, 2017 WL 4621777, at *5; Celebrex, 2017 WL 3669604, at *10 (“the class of thirty-two direct purchasers is comprised of companies … spread across the United States and Puerto Rico. Such geographic dispersion regularly weighs in favor of an impracticability finding”). Negative Damages Expert witness fees (which are not recoverable even if a plaintiff prevails) already exceed $4.6 million,83 and will likely increase. At least 36% of the proposed class have negative claims.84 Defendants’ speculation that 82 The “nature of the action” also favors finding joinder to be impractical because “it has long been recognized that class actions play an important role in the private enforcement of antitrust actions.” Ovcon, 246 F.R.D. 293, 307 (D.D.C. 2007); see also Nexium, 296 F.R.D. 53 (“class actions are a particularly appropriate mechanism for achieving such enforcement[.]”). 83 DPP Open Br. at 17 (citing the declaration of Elena K. Chan). 84 DPP Open Br. at 18. Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 40 of 44 35 these obstacles can be overcome has been disproven by the experience on remand in King Drug. Joinder of “all” class members is plainly not practicable. III. CONCLUSION DPPs respectfully request that their motion be granted. Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 41 of 44 36 Dated: June 4, 2018 Kenneth S. Canfield DOFFERMYRE SHEILDS CANFIELD & KNOWLES, LLC 1335 Peachtree Street, NE, Suite 1900 Atlanta, GA 30309 Phone: (404) 881-8900 kcanfield@dsckd.com Liaison Counsel for Direct Purchaser Plaintiffs David P. Smith Susan Segura SMITH SEGURA & RAPHAEL, LLP 3600 Jackson St., Ste. 111 Alexandria, LA 71303 Phone: (318) 445-4480 dsmith@ssrllp.com sseggura@ssrllp.com John Gregory Odom Stuart Des Roches Dan Chiorean ODOM & DES ROCHES Poydras Center 650 Poydras Street, Suite 2020 New Orleans, LA 70130 Phone: (504) 522-0077 jodom@odrlaw.com stuart@odrlaw.com dchiorean@odrlaw.com /s/ David F. Sorensen David F. Sorensen Ellen T. Noteware Nick Urban BERGER & MONTAGUE, P.C. 1622 Locust Street Philadelphia, PA 19103 Phone: (215)-875-4683 dsorensen@bm.net enoteware@bm.net nurban@bm.net Co-Lead Counsel for Direct Purchaser Class Plaintiffs Bruce E. Gerstein Joseph Opper Elena K. Chan GARWIN GERSTEIN & FISHER LLP 88 Pine Street, 10th Floor New York, NY 10005 Phone: (212) 398-0055 bgerstein@garwingerstein.com jopper@garwingerstein.com echan@garwingerstein.com Co-Lead Counsel for Direct Purchaser Class Plaintiffs Peter Kohn FARUQI & FARUQI, LLP 101 Greenwood Avenue, Ste. 600 Jenkintown, PA 19046 Phone: (215) 277-5770 pkohn@faruquilaw.com Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 42 of 44 37 Russell A. Chorush Miranda Jones HEIM PAYNE & CHORUSH LLP Chase Tower 1111 Bagby, Suite 2100 Houston, TX 77002 Phone: (713) 221-2000 rchorush@hpcllp.com mjones@hpcllp.com Counsel for Louisiana Drug Company, Inc. Joshua P. Davis LAW OFFICES OF JOSHUA P. DAVIS 437A Valley Street San Francisco, CA 94131 Phone: (415) 422-6223 davisj@usfca.edu David Balto LAW OFFICES OF DAVID BALTO 2600 Virginia Ave N.W., Suite 1111 Washington, DC 20037 Counsel for Rochester Drug Co- Operative, Inc. Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 43 of 44 38 CERTIFICATE OF COMPLIANCE Pursuant to Local Rule 7.1D, counsel hereby certifies that the foregoing Direct Purchaser Class Plaintiffs’ Memorandum in Support of their Motion for Class Certification has been prepared in accordance with Local Rule 5.1 using Times New Roman 14 point font. __/s/ Ellen T. Noteware CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing document was filed electronically via CM/ECF in the United States District Court for the Northern District of Georgia on June 4, 2018, with notice of same being electronically served by the Court to all attorneys of record. /s/ Ellen T. Noteware Case 1:09-md-02084-TWT Document 1741 Filed 06/20/18 Page 44 of 44